APPENDIX 4E
FOR THE YEAR ENDED 30 JUNE 2023
Name of entity:
Yowie Group Limited
1.
ABN or equivalent company
reference:
98 084 370 669
Reporting period:
Previous corresponding
period:
Year ended 30 June 2023
Year ended 30 June 2022
2.
Results for announcement to the market
2.1 Revenue from ordinary activities
down
15%
to
US$
13,285,268
2.2 Profit from ordinary activities for the period after
down
112%
to
(102,947)
tax attributable to members
2.3 Net profit for the period attributable to members
down
112%
to
(102,947)
2.4 Dividends
Final dividend
Interim dividend
Amount per security
Franked amount per
security
Nil
Nil
N/A
N/A
2.5 Record date for determining entitlements to the
dividends
N/A
2.6 Brief explanation of any of the figures reported above to enable the figures to be understood:
Commentary on the results for the period can be found in the Annual Report accompanying this
Appendix 4E.
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YOWIE GROUP LIMITED
ABN 98 084 370 669
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2023
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CONTENTS
Company Directory
Chairman’s Letter
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report
ASX Additional Information
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6
27
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70
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(Expressed in US Dollars (US$), unless stated otherwise)
COMPANY DIRECTORY
DIRECTORS:
Mr Sean Taylor (Executive Chairman)
Mr Nicholas Bolton (Non-Executive Director)
Mr John Patton (Non-Executive Director)
Mr Scott Hobbs (Non-Executive Director)
KEY MANAGEMENT:
Mr Wayne Brekke (Global Chief Financial Officer)
Ms Cynthia Thayer (Global Chief Marketing Officer)
COMPANY
SECRETARY:
REGISTERED AND
PRINCIPAL OFFICE:
Mr Neville Bassett
Level 4
216 St Georges Terrace
Perth WA 6000
Telephone: (08) 6268 2640
ABN:
98 084 370 669
COMPANY WEBSITE ADDRESS:
www.yowieworld.com
AUDITORS:
SHARE REGISTRY:
RSM Australia
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
Link Market Services Limited
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: 1300 554 474 or +61 2 8280 7111
ASX CODE:
YOW
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1 | Page
CHAIRMAN LETTER
Dear Shareholders,
With just over 18 months in the chair, last year would have to be one of the most dynamic on record,
with much going on behind the scenes. However, we can’t hide from the fact that the overall result
has been less than pleasing. With the increase in raw material cost, transport and logistics increasing
and the higher cost of living driving revenues down, we delivered a less than acceptable result.
To this end we commissioned an extensive third-party productivity review in the hope of stemming
cost increases and adding efficiencies to our production and cost base. This was a valuable exercise
with several new ways of working introduced and a number to still implement.
With our core product still being manufactured in the US, the ever-falling Australian Dollar has
impacted the effective cost to market pricing into Australia. This however is a relatively small amount
of overall production.
Australia saw the introduction of 2 new SKU’s for Easter. Both the Giant Yowie and the 100gm Yowie
Surprise Egg. It was great to see a ‘range’ of Yowie product on the shelves of key major retailers with
sell through exceeding expectations. We also saw the introduction of the 150gm AFL and NRL Footy
Eggs which also sold through well in their respective states under license from the AFL and NRL.
As some of you may have read, 2023 saw the retirement of CEO, Mark Schuessler. We would like to
thank Mark for his many years of service and wish him well for a well-deserved more relaxing stage of
life. This obviously leaves a gap, with a global search being conducted for the right. But more on that
later….
Part of the strategy that we introduced upon my arrival was the introduction of licensed product that
we feel aligns with the core values of Yowie. Some may struggle to understand how this fits with
AFL/NRL. Whilst not all values align, one cannot deny that Australia is at the core of these 3 properties.
We are incredibly proud to announce our Yowie AFL and NRL surprise milk chocolate footballs that we
have selectively teased the market with for this year’s football finals. Having been on the shelves for a
week, we are seeing a fantastic response to these football jersey wearing Yowies. You know it’s good
luck if you open one and manage to get the team you support. Let’s see if this rings true for the finals.
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CHAIRMAN LETTER
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This limited release finals product will be back on the shelves next year for Easter and the start of the
2024 AFL and NRL seasons.
One of the most exciting announcements for the year was the acquisition of the Bluey Seasonal
Confectionery license for the next 3 years in both Australia and New Zealand. We will be launching
with six SKUs for Easter 2024 which will be followed by a Bluey Christmas 2024 offer and then by an
expanded Easter offer for 2025. To date the retail acceptance has been extremely pleasing.
Bluey is probably the most successful children’s license ever developed in Australia with a huge global
presence and is a License for which we see an extended life migrating to evergreen status in the years
to come. We would like to thank the BBC for their support and look forward to working with them over
the coming years to develop innovative product for our nominated territories.
We will be seeking retail partners in New Zealand for Yowie, Bluey and NRL and expect to announce
support from key NZ retailers shortly.
About Bluey
Bluey is an Australian preschool animated television series that premiered on ABC Kids on 1 October 2018. The program was
created by Joe Brumm and is produced by Queensland-based company Ludo Studio. It was commissioned by the Australian
Broadcasting Corporation and the British Broadcasting Corporation, with BBC Studios holding global distribution and
merchandising rights. The series made its premiere on Disney Junior in the United States and is released internationally on
Disney+.
The show follows Bluey, an anthropomorphic six-year-old Blue Heeler puppy who is characterised by her abundance of energy,
imagination and curiosity of the world. The young dog lives with her father, Bandit; mother, Chilli; and younger sister, Bingo,
who regularly joins Bluey on adventures as the pair embark on imaginative play together. Other characters featured each
represent a different dog breed. Overarching themes include the focus on family, growing up and Australian culture. The
program was created and is produced in Queensland; its capital city Brisbane inspires the show's setting.
3 | Page
CHAIRMAN LETTER
Bluey has received consistently high viewership in Australia on both broadcast television and video on demand services. It has
influenced the development of merchandise and a stage show featuring its characters. The program has won two Logie
Awards for Most Outstanding Children's Program as well as an International Emmy Kids Award in 2019. It has been praised
by television critics for depicting a modern everyday family life, constructive parenting messages, and the role of Bandit as a
positive father figure.
Bluey is an animated television character and one of the world’s biggest entertainment brands. The Bluey television series:
Is the #1 Children’s TV series in Australia
is shown in more than 60 countries including the USA, UK and China
•
•
• was streamed for over 20 billion minutes on Disney + last year
• has 1.87 million Facebook followers;
•
is broadcast nationally in Australia on ABC Kids, ABC iview and Disney +
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The BBC’s most recent Annual Report stated: Global hit Bluey cemented her status as an iconic children’s brand, appearing as
a giant, hand-painted balloon in New York’s 96th Macy’s Thanksgiving Day Parade. Co-commissioned by the ABC and BBC
Studios from Ludo Studios and distributed by BBC Studios, the award-winning Bluey is now broadcasting and streaming in 60
countries, with licensed products available in over 20 countries and the first US tour for Bluey’s Big Play The Stage Show.
Bluey’s success helped to increase sales for consumer products by 10% in the year, and BBC Studios expanded its approach to
brand extensions and partnerships.
The next fantastic news which we announced is the acquisition of the chocolate manufacturing
business Ernest Hillier. This includes all Brands, recipes, business names, and owned plant and
equipment. The business is located in North Coburg on a site of approximately 4,000 sq metres. Ernest
Hillier was Australia’s first Chocolate manufacturer, and oldest privately owned chocolatier being
established in 1914.
We have been working with the administrators, customers, retailers and staff of the plant on
reinvigorating relevant and profitable parts of the business. We have been delighted with the
enthusiasm of the staff to re-engage with the business and are working currently with them on future
employment prospects. This new facility provides not only the ability to manufacture many of our new
products ourselves for Australia and NZ but also to manufacture product for export to the US and other
countries.
This manufacturing facility allows us to have greater control of the whole process and to innovate to
meet customer and retailer expectations while having greater control over the costing process.
Continuing our desire to have greater control over costing and process, we are moving in Australia
from our current distributor model to a self-distribution model. We are currently working with
Universal Candy, who have been a terrific partner for a number of years, to provide a smooth transition
over the coming months.
With Australia being a much smaller market than the US, the opportunity exists to test market products
and their success or otherwise to migrate them to the US. A case in point is the Giant Yowie which was
recently introduced in Australia and will be launched in the US later this year. Along with the Giant
Yowie, we’ll also launch an innovative new product called Yowie-Pop.
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CHAIRMAN LETTER
With all this new activity and ability, the search for our new global CEO is imperative to the future
success of the business. We are well down the track in conversations, with the major change
potentially having the CEO located in Australia. This person will ideally have manufacturing experience
as well as a Global understanding of the confectionery category and a real understanding of both
relevant consumers and retailer requirements. When we can confirm this position we will announce
immediately.
Finally I’d like to thank the board for their incredible hard work over the past 12 months in driving
change and productivity to set the business up for real success.
To current shareholders, as always, I am available should you have any questions. Don’t forget to rush
out and get your AFL/NRL finals edition Yowie before they sell out!
Yours Sincerely,
Sean Taylor
Executive Chairman
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DIRECTORS’ REPORT
Your Directors submit their report together with the financial report of Yowie Group Limited
(“the Company”) and the consolidated entity (“the Group”) for the year ended 30 June 2023.
DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until
the date of this report are as follows. Directors were in office for this entire period unless
otherwise stated.
As at the date of this report, the Company does not have an Audit, Remuneration or Nomination
Committee of the Board of Directors. The full Board, therefore, assumes the responsibilities of
these committees. As the Company develops, these committees may be established.
Mr Sean Taylor
Executive Chairman
Mr Taylor had an extensive career in Advertising/Media working at DDB Needham/Bond
Media/Southern Cross Media and Austereo prior to launching his own agency specialising in
FMCG and Licensing. Major clients included The Walt Disney Company, Nestle, Kelloggs, Lion
Nathan and Novartis. He sold this business to PLC Photon now Enero, remaining on in charge
of all Activation agencies within the group. He was with the group for more than 12 years.
Subsequently, he formed another agency which was then acquired by WPP/Ogilvy where he
remained for 8 years with various roles including CEO of Ogilvy Action, Managing Director of
Ogilvy Group Melbourne and CEO Geometry and VMLY&R Commerce. Mr Taylor completed his
earnout there and has subsequently set up a few digital Advertising/Media businesses which
he currently Chairs.
Mr Mark Schuessler
Global Chief Executive Officer (retired on 24 July 2023)
Managing Director (retired on 24 July 2023)
Qualifications: BSBA, MBA Finance
Mr Schuessler is an experienced senior executive leader with more than 30 years’ of U.S. and
international markets experience. Mr Schuessler has extensive cross discipline and cross
category operational leadership experience in the consumer-packaged goods industry with
Doumak Inc., The Campbell Soup Company, Procter and Gamble and early financial roles in the
printing and banking industries.
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DIRECTORS’ REPORT
DIRECTORS (continued)
Mr Mark Schuessler (continued)
Mr Schuessler was President and Chief Operating Officer of Doumak Inc. from 2013, a privately
held US$100+ million confectionery manufacturer of the Campfire brand, private label
marshmallows distributed throughout the U.S. and the Rocky Mountain brand distributed in
more than 70 countries globally. During his leadership period, the Company experienced annual
top line double digit growth and a significant increase in the bottom line through increased
productivity, new item launches and a global market focus. Prior to being President and Chief
Operating Officer, Mr Schuessler was Vice President and Chief Operating Officer of Sales and
Marketing with significant sales and profit growth.
Mr Nicholas Bolton
Non-Executive Director
Mr Bolton has managed operational, investments and restructures assets in aviation, finance,
property, energy, shipping, infrastructure and IT sectors. Mr Bolton is focused on delivering
superior risk adjusted returns through active management and innovative solutions to
challenging issues for investors and banking industries.
Mr John Patton
Non-Executive Director
Qualifications: B.Ec, CA (CAA), F Fin
Mr Patton is a chartered accountant with over 35 years of professional services and industry
experience. He was previously a Partner with Ernst & Young in the Transactions Advisory
Services division. Mr Patton has senior executive and extensive corporate finance credentials,
having been involved in over 150 corporate transactions.
Mr Scott Hobbs
Non-Executive Director
Scott Hobbs has over 20 years experience in FMCG, within retailers such as BIG W and Metcash
IGA, primarily in the management and development of various product categories including
confectionery. In addition to category and brand management, a large period of time has been
within the manufacturing sector of the confectionery industry and the subsequent sales
management of candy products to major Australian and International retailers.
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DIRECTORS’ REPORT
DIRECTORS (continued)
Directorships of other listed companies during the past three years
Name
Company
Mr S Taylor
Mr M Schuessler
Mr N Bolton
Mr J Patton
Mr S Hobbs
No other directorships
No other directorships
Keybridge Capital Limited
Metgasco Limited
Keybridge Capital Limited
Aurora Funds Management Limited, as Responsible
Entity of HHY Fund1 and Aurora Global Income Trust
No other directorships
Ceased
-
-
Current
Current
Current
Current
-
1 HHY Fund was delisted from ASX on 29 August 2022
Interests in the shares and options of the Company
As at the date of this report, the Directors (including their personal related parties) held the
following ordinary shares, options and rights over ordinary shares in the Company as set out
below.
Name
Mr S Taylor
Mr M Schuessler 1
Mr N Bolton 2
Mr J Patton 3
Mr S Hobbs
Total
Number of
Ordinary Shares
1,375,212
-
-
26,526,643
-
27,901,855
Number of Options
-
-
-
-
-
-
Number of Rights
10,800,000
-
-
-
-
10,800,000
1 Mr M Schuessler’s shareholding at the date of his retirement on 24 July 2023 was 1,208,248 shares. Disclosure of
a KMP’s shareholding is not required subsequent to his retirement.
2 Mr N Bolton disclosed in Appendix 3Y dated 12 May 2022 that he ceases to hold relevant interest in YOW
securities held by Keybridge Capital Limited pursuant to section 608(1) of the Corporations Act.
3
Indirectly held – Aurora Funds Management Limited in its capacity as responsible entity for HHY Fund.
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DIRECTORS’ REPORT
COMPANY SECRETARY
Mr Neville Bassett AM
Company Secretary
Qualifications: BCom, FCA
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Mr Bassett is a chartered accountant with more than 30 years of experience. He has been
involved with a diverse range of Australian public listed companies in directorial, company
secretarial and financial roles.
SENIOR EXECUTIVES
Mr Wayne Brekke
Global Chief Financial Officer
Qualifications: BBA, MBA Finance, CPA
Mr Brekke is a senior finance executive with over 30 years of broad US and international finance
experience. Mr Brekke has held extensive finance leadership positions in food, consumer
products and manufacturing with global companies such as, McDonald’s, Kraft Foods and AC
Nielsen.
Prior to joining Yowie Group Limited, Mr Brekke was the Group Controller for the Garvey Group,
a subsidiary of Orora Limited (ASX: ORA) where he successfully implemented various
operational efficiencies.
Ms Cynthia Thayer
Global Chief Marketing Officer
Qualifications: BA
Ms Thayer has over 25 years of marketing expertise in key areas including brand architecture
development, market research, consumer packaged goods (CPG) advertising across traditional
and digital channels, retail and shopper marketing, licensing, toy design and new product
development. Ms Thayer also has broad marketing expertise in food, consumer products,
manufacturing and advertising agencies with the Chamberlain Group, TPN, Flair
Communications, Creata and the Marketing Store.
Ms Thayer came from the largest global manufacturer of garage door openers, The Chamberlain
Group, managing its newest product development growth area into the smart home category.
She was a key player in bringing their newest smart technology brand to life from the ground
up, then building out and implementing its go-to-market plan across TV advertising, digital
advertising, SEO, social media, PR and retail merchandising.
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DIRECTORS’ REPORT
PRINCIPAL ACTIVITY
Yowie Group Limited is a global brand licensing Company, specialising in the development of
consumer products designed to promote learning, understanding and engagement with the
natural world through the adventures and exploits of six endearing Yowie characters. Educating
children and adults about the environment and ecology and ‘Save the Natural World’ is at the
heart of the Yowie proposition. Yowie Group Limited employs its company-owned intellectual
property rights to supply Yowie branded chocolate confectionery products, a digital platform
and Yowie branded licensed consumer products. The Group’s vision for the Yowie brand is to
distribute on a widening basis the Yowie product in the US (United States of America) and ANZ
(Australia and New Zealand) with further international expansion.
OPERATING AND FINANCIAL REVIEW
During the financial year, the Group continued to focus on building a strong sales and
distribution network both in the US and ANZ markets, with some updates below.
Sales and Distribution
• Global net sales for the year ended 30 June 2023 were US$13.28 million, 15% lower than
the previous corresponding period.
The decrease in revenue is primarily due to softness in Yowie core product both in the US
and ANZ. Uncertain economic conditions negatively impacted consumer purchasing
decisions on non-essential food items. Also, retailers have remained cautious with
inventory management and their level of promotional spend.
• The Group’s priorities remain to drive sales growth through increased retail distribution
in both the US and AUS, expand product offerings, be competitive across all trade
channels, and expand consumer awareness through digital and experiential engagement.
• The Group secured non-exclusive licensing agreements to develop, manufacture and sell
seasonal confectionery products for Australian Football League (AFL), National Rugby
League (NRL), Bluey Seasonal Confectionery for Easter and Christmas in Australia.
Corporate
Corporate developments during the current year included:
• The Group received a decision on its longstanding litigation with Henry Whetstone, Jr. and
his companies, Whetstone Industries, Inc. and Atlantic Candy Company. Refer to Note
18(b) in the Notes to the Consolidated Financial Statements for details.
• Mr Mark Schuessler retired from his position as Managing Director and Global CEO on 24
July 2023. The Board would like thank Mr Schuessler for his tenure.
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DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW (continued)
Financial Overview
• The Group’s gross margin remained steady at 48% during the financial year, despite the
increase in raw material costs.
• The Group’s EBITDA loss for the year was US$1.13 million, compared to last year’s EBITDA
gain of US$0.184 million.
The decrease in EBITDA is mostly due to lower sales and higher legal cost related to the
Whetstone case and its settlement.
*EBITDA (Earnings before interest, taxes, depreciation, amortization, share-based
payments expense and inventory write-down)
• The Group booked a reversal of impairment of non-current assets of US$1.05 million
during the year (2022: US$0.78 million). The reversal of impairment during the year of
US$0.72 million related to the refund for deposit on manufacturing equipment which was
previously impaired in FY2020. The remaining US$0.33 million mostly related to
manufacturing equipment previously impaired in FY2020. The Group was able to utilise
these assets, a portion of the original impairments were reversed, with these assets being
subject to depreciation.
• Net loss after tax for the year ended 30 June 2023 was US$0.1 million compared to a net
profit after tax of US$0.84 million in the previous corresponding period.
The reason for the decrease in profit after tax is similar to the reason for a decrease in
EBITDA as discussed above.
• The net assets of the Group was steady at US$9.37 million, compared to US$9.33 million
at 30 June 2022.
• As at 30 June 2023 the Group’s consolidated cash position was US$7.4 million (30 June
2022: US$8.2 million), with inventory up by US$0.9 million over last year.
• The Group’s operating cash outflow for the year ended 30 June 2023 was US$1.33 million,
compared to a breakeven in the previous corresponding period. The decrease in operating
cash flow was predominantly attributable to lower sales during the current year.
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DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW (continued)
Financial Overview (continued)
• Capital, funding and liquidity are managed at the corporate level. A summary of the cash
flows for the Group is as follows:
Cash outflows used in:
- Operating activities
-
Investing activities
- Financing activities
Net cash outflows for the year
US$
(1.33 million)
0.62 million
-
(0.71 million)
Opening cash
Effect of foreign exchange movements
Closing cash and cash equivalents balance
8.18 million
(0.07 million)
7.40 million
Material Business Risks
The material business risks faced by the Group which are likely to impact the financial prospects
of the Group include:
• Economic uncertainty – the softness in sales from uncertain macroeconomic conditions
negatively impacted consumer purchasing decisions on non-essential food items,
including Yowie’s products, resulting in the Group experiencing negative operating cash
flows during the current financial year. Should this trend continue, the Group is likely to
further deplete its cash reserves. The Group remains committed to driving sales growth
through increased retail distribution in both the US and AUS; expanding product offerings;
and being competitive across all trade channels. Recent efforts to drive sales growth
includes obtaining non-exclusive licensing agreements to develop, manufacture and sell
seasonal confectionery products for Australian Football League (AFL), National Rugby
League (NRL), Bluey Seasonal Confectionery for Easter and Christmas in Australia.
• Supply chain disruption – the Group sources products and materials from some key
suppliers. The Group also has a contract manufacturing arrangement to produce Yowie
products in the United States. Any disruption to this supply chain dynamic could have a
material impact on the Group’s financial results. The Group continues to identify and
establish relationships with multiple suppliers to minimise any potential disruptions.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors, there were no matters that significantly affected the state of
affairs of the Group during the financial year, other than those referred to in the review of
operations.
DIVIDENDS
The Directors recommend that no amount be paid by way of dividend. No dividend has been
paid or declared since the end of the financial year.
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DIRECTORS’ REPORT
DIRECTORS' MEETINGS
The number of meetings attended by each Director during the year was as follows:
Director
Mr S Taylor
Mr M Schuessler
Mr N Bolton
Mr J Patton
Mr S Hobbs
Eligible to Attend
5
4
5
5
5
Attended
5
4
5
5
5
SHARES UNDER OPTION
There were no unissued ordinary shares under options outstanding at 30 June 2023.
Unissued ordinary shares under rights outstanding at 30 June 2023 are as follows:
Rights
Service rights
Number of
Securities
10,800,000
Exercise Price
(A$)
-
Expiry Date
8 Dec 2026
Shares issued as a result of the exercise of options
No shares were issued as a result of the exercise of options during the year ended 30 June 2023,
including the period up to the date of this report.
EVENTS SUBSEQUENT TO BALANCE DATE
• On 24 July 2023, Mr Mark Schuessler retired from his position as Managing Director and
Global CEO. The Board would like thank Mr Schuessler for his tenure.
• The Group entered into merchandising agreements with BBC Studios, AFL and NRL. Refer to
Note 18(a) for disclosure on future minimum guaranteed royalty fees.
• Subsequent to year end, the Group entered into a binding Asset Purchase Agreement with
the administrators of Chocolate and Confectionary Company Pty Limited to acquire the
assets of the Ernest Hillier chocolate business for A$375,000.
Yowie is acquiring all the owned plant and equipment and all the IP of Ernest Hillier, including
all business names and brands of the Ernest Hillier chocolate business, and is to enter into
new leases for the premises and obtaining either new leases or assignments in respect of
leased plant and equipment used by Ernest Hillier. Yowie is not assuming any of the existing
liabilities of the sellers.
Apart from the matters discussed above, no other matter or circumstance has arisen since 30
June 2023 that has significantly affected, or may significantly affect the Group’s operations, the
results of those operations, or the Group’s state of affairs in future financial years.
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DIRECTORS’ REPORT
LIKELY DEVELOPMENTS
Information on likely developments in the operations of the Group is contained within the
operating and financial review.
ENVIRONMENTAL REGULATION
The Group is not subject to any significant environmental regulation under the United States
and Australian Commonwealth Federal or State law.
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited)
This Remuneration Report outlines the Director and Executive remuneration arrangements of
the Company and the Group in accordance with the requirements of the Corporations Act 2001
and its Regulations. For the purposes of this report, Key Management Personnel (KMP) of the
Group are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Company and the Group, directly or indirectly,
including any Director (whether Executive or otherwise) of the parent company.
The Directors present the Yowie Group Limited FY2023 remuneration report, outlining key
aspects of our remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
(a)
(b)
(c)
(d)
(e)
(f)
Key management personnel (KMP) covered in this report
Remuneration policy and link to performance
Elements of remuneration
Remuneration expenses for KMP
Contractual arrangements for KMP
Equity instrument disclosures relating to Key Management Personnel
(a)
Key Management Personnel (KMP) covered in this report
Name
Mr Sean Taylor
Mr Mark Schuessler
Mr Nick Bolton
Mr John Patton
Mr Scott Hobbs
Mr Wayne Brekke
Ms Cynthia Thayer
Position
Executive Chairman
Global Chief Executive Officer (retired on 24 July 2023)
Managing Director (retired on 24 July 2023)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Global Chief Financial Officer
Global Chief Marketing Officer
(b)
Remuneration policy and link to performance
The Board of Directors
is responsible for determining and reviewing compensation
arrangements for the Directors and Executive officers. The Board will assess the appropriateness
of the nature and amount of emoluments of such officers on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality Board and Executive team.
From time to time, the Board engages an external remuneration consultant to assist with
reviewing the Group’s remuneration policy.
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(b)
Remuneration policy and link to performance (continued)
In particular, the Board aims to ensure that remuneration practices are:
competitive and reasonable, enabling the Company to attract and retain key talent;
•
• aligned to the Company’s strategic and business objectives and the creation of
shareholder value;
transparent and easily understood; and
•
• acceptable to shareholders.
To assist in achieving these objectives, the Board has linked the nature and amount of executive
KMP remuneration to the Company’s financial and operational performance.
Executive KMP are those directly accountable for the operational management and strategic
direction of the Company.
Having regard to the number of members currently comprising the Company’s Board and the
stage of the Company’s development, the Company does not have a separately established
remuneration committee. The functions that would be performed by a remuneration committee
are currently performed by the full Board.
Remuneration framework
Element
Fixed annual
remuneration
(FR)
Short-term
incentives
(STI)
Long-term
incentives
(LTI)
Purpose
Provide competitive market salary
monetary benefits.
including superannuation and non-
Reward available for meeting pre-determined performance hurdles within a
12-month time period.
Performance pay is ‘at risk’ such that if performance hurdles are not met, the
payment is not made, other than at the discretion of Directors to cover
unforeseen circumstances.
Performance pay may be paid in cash or in the form of share-based
compensation at the Board’s absolute discretion through participation in the
annual grants of service rights or performance rights where vesting is subject
to performance hurdles.
Performance hurdles are aligned to long-term shareholder value.
Performance rights are ‘at risk’ such that if performance hurdles are not met,
the performance rights do not vest.
The long-term incentive once determined will be paid in cash or awarded as
fully vested service rights.
Performance rights are paid in the form of share-based compensation.
Service Rights One-off issuance subject to Board’s discretion to attract and retain high calibre
employee. Vesting of rights subject to Employee remaining employed by the
Company on the vesting date.
16 | Page
DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(b)
Remuneration policy and link to performance (continued)
Balancing short-term and long-term performance
Annual incentives are set at a maximum of 100% of fixed remuneration, to drive performance
without encouraging undue risk-taking. Long-term incentives are assessed over a two or three
year period and are designed for the achievement of long-term growth in shareholder returns.
Assessing performance
The Board is responsible for assessing performance against KPIs and determining the STI and LTI
to be paid. To assist in this assessment, the Board receives detailed reports on performance from
management, which are based on independently verifiable data such as financial measures,
market share and data from independently run surveys.
Minimum shareholding and holding conditions
All Directors and employees are encouraged to own shares in the Company. The Company does
not have a formal minimum shareholding policy or mandatory holding condition on awarded
shares. However, it is important to note that the nominal value of share rights is determined at
the commencement of the performance period motivating executives to hold shares and grow
shareholder value.
Use of remuneration consultants
On an as-needed basis, the Company may engage a remuneration consultant to provide various
services in relation to executive KMP remuneration. During the year ended 30 June 2023, the
Company has not engaged any remuneration consultants.
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(c)
(i)
Elements of remuneration
Fixed annual remuneration (FR)
Fixed remuneration consists of a base remuneration package, which includes Directors’ fees (in
the case of Directors), salaries, consulting fees, employer contributions to superannuation funds
and non-monetary benefits such as health insurance and tax advisory services.
Fixed remuneration levels for Directors and Executive officers will be reviewed annually, or on
promotion by the Board through a process that considers the individual’s personal development,
achievement of key performance objectives for the year, industry benchmarks wherever
possible and CPI data.
Total remuneration for Non-Executive Directors is determined by resolution of shareholders.
The Board determines actual payments to Directors and reviews their remuneration annually,
based on market relativities and the duties and accountabilities of the Directors. The maximum
available aggregate remuneration approved for Non-Executive Directors is A$200,000. Non-
Executive Directors do not receive any other retirement benefits other than a superannuation
guarantee contribution required by government regulation, which was 10.5% of their fees for
the year ended 30 June 2023.
Non-Executive Directors may provide specific consulting advice to the Company upon direction
from the Board. Remuneration for this work is made at market rates. No such advice was
provided in the year ended 30 June 2023.
(ii)
Short-term incentives (STI)
Feature
Max opportunity
Performance metrics
100% of fixed remuneration or as stipulated in the respective employment contract.
Description of STI
The STI metrics align with our strategic priorities of market competitiveness, achieving
financial budget, operational excellence, shareholder value and fostering talented and
engaged people.
Achievement of award
and Board’s discretion
The Board has discretion to adjust remuneration outcomes up or down to prevent any
inappropriate reward outcomes, including reducing (down to zero, if appropriate) any
deferred STI award.
Delivery of STI
Exercise price
Forfeiture and
termination
100% of the STI award is paid in cash or equity, subject to meeting vesting conditions of
performance hurdles. The mode of delivery is at the discretion of the Board and, where
applicable, subject to shareholders’ approval.
Exercise price of options is determined based on premium to share price at which the
company’s shares are traded on the Australian Securities Exchange on date of the grant.
Exercise price of performance rights are generally nil.
Options and performance rights will lapse if performance conditions are not met. Options
and performance rights will be forfeited on cessation of employment unless the Board
determines otherwise in its sole and absolute discretion, e.g. in the case of retirement due
to injury, disability, death or redundancy.
18 | Page
DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(c)
(iii)
Elements of remuneration (continued)
Long-term incentives (LTI)
Feature
Max opportunity
100% of fixed remuneration or as stipulated in the respective employment contract.
Description of LTI
Performance metrics
The LTI metrics align with our strategic priorities of market competitiveness, achieving
financial budget, operational excellence and long-term shareholder value.
Delivery of LTI
Exercise price
Forfeiture and
termination
100% of the LTI award is paid in cash or equity, subject to meeting vesting conditions of
performance hurdles. The mode of delivery is at the discretion of the Board and subject to
shareholders’ approval.
Exercise price of options is determined based on premium to share price at which the
company’s shares are traded on the Australian Securities Exchange on date of the grant.
Exercise price of service rights and performance rights are generally nil.
Options and performance rights will lapse if performance conditions are not met. Options
and performance rights will be forfeited on cessation of employment unless the Board
determines otherwise in its sole and absolute discretion, e.g. in the case of retirement due
to injury, disability, death or redundancy.
(vi)
Service rights (SR)
Feature
Max opportunity
Description of SR
One off issuance subject to Board’s discretion to attract and retain high calibre employee.
Performance metrics
Subject to employee remains employed by the Company on the vesting date.
Delivery of SR
Exercise price
Forfeiture and
termination
100% of the SR award is paid in cash or equity, subject to meeting vesting conditions of
performance hurdles. The mode of delivery is at the discretion of the Board and subject to
shareholders’ approval.
Exercise price of options is determined based on premium to share price at which the
company’s shares are traded on the Australian Securities Exchange on date of the grant.
Exercise price of service rights and performance rights are generally nil.
Options and service rights will lapse if performance conditions are not met. Options and
performance rights will be forfeited on cessation of employment unless the Board
determines otherwise in its sole and absolute discretion, e.g. in the case of retirement due
to injury, disability, death or redundancy.
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19 | Page
DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(c)
Elements of remuneration (continued)
Company performance
The table below shows the performance of the Company for the past five financial years.
FY2023
FY2022
FY2021
FY2020
FY2019
Total Income (US$)
13,285,268
15,605,658
12,578,381
11,026,691
14,701,672
Net Income / (Loss) (US$)
(102,947)
839,506
894,956
(8,132,605)
(5,099,511)
Return of Capital (US$)
Closing Share Price (A$)
-
0.026
-
6,066,311
2,981,926
0.046
0.041
0.035
-
0.05
Number of Shares
218,567,901
218,567,901
218,567,901
218,296,162
217,748,987
Market Capitalisation (A$)
5,682,765
10,054,123
8,961,284
7,640,366
11,322,947
(d)
Remuneration expenses for KMP
Remuneration packages may contain the following key elements:
a) Short-term benefits, including salary and fees, bonus and other benefits;
b) Post-employment benefits, including superannuation; and
c) Share-based payments, including options and rights granted as remuneration.
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(d)
Remuneration expenses for KMP (continued)
The following table discloses the remuneration of the key management personnel during the financial year:
FY2023
Directors
Mr S Taylor
Mr M Schuessler
Mr N Bolton
Mr J Patton
Mr S Hobbs
Senior Executives
Mr W Brekke
Ms C Thayer
Total
Short-Term Benefits
Salary and
Fees
(US$)
Bonus
(US$)
Post-
Employment
Superannuation
(US$)
Share-based Payments 1
Performance-
based
(US$)
Service-
based
(US$)
Options
Termination
Payments
(US$)
(US$)
Total
(US$)
Performance
based
(%)
-
322,600
30,297
30,297
30,297
207,600
222,600
843,691
-
-
-
-
-
-
-
-
-
-
3,181
3,181
3,181
-
-
9,543
-
-
-
-
-
-
-
-
134,955
-
-
-
-
-
-
134,955
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
134,955
322,600
33,478
33,478
33,478
207,600
222,600
988,189
-
-
-
-
-
-
-
-
1 Calculated in accordance with AASB 2 Share-based Payments. Refer to Note 15
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(d)
Remuneration expenses for KMP (continued)
FY2022
Directors
Mr S Taylor
Mr M Schuessler
Mr N Bolton
Mr J Patton
Mr S Hobbs
Mr L Carroll 3
Senior Executives
Mr W Brekke
Ms C Thayer
Total
Short-Term Benefits
Salary and
Fees 1
(US$)
Bonus
(US$)
Post-
Employment
Superannuation
(US$)
-
322,600
32,650
32,650
18,264
24,265
207,600
222,600
860,629
-
25,000
-
-
-
-
20,000
20,000
65,000
-
-
3,265
3,265
1,826
2,427
-
-
10,783
This includes annual leave where applicable
1
2 Calculated in accordance with AASB 2 Share-based Payments. Refer to Note 15
3 Resigned on 9 December 2021
Share-based Payments 2
Performance-
based
(US$)
Service-
based
(US$)
Options
Termination
Payments
(US$)
(US$)
Total
(US$)
Performance
based
(%)
-
-
-
-
-
-
-
-
-
118,090
-
-
-
-
-
-
-
118,090
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
118,090
347,600
35,915
35,915
20,090
26,692
227,600
242,600
1,054,502
-
7%
-
-
-
-
9%
8%
6%
22 | Page
DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(d)
Remuneration expenses for KMP (continued)
Share-based compensation to key management personnel
The Yowie Employee Incentive Plan (EIP) which had an approval period of three years, expired
on 23 November 2018. In the event that the Company wishes to issue equity securities under an
EIP, a new EIP will need to be approved by shareholders.
No options or rights granted to key management personnel as remuneration during the year.
No options or rights vested, exercised or lapsed during the year.
(e)
Contractual arrangements for KMP
Remuneration and other terms of employment for Executives are formalised in a service
agreement. The KMP are remunerated on a total fixed remuneration (TFR) basis inclusive of
superannuation and allowances.
Position
Executive
Total Annual Fixed
Remuneration
Contract
Duration
Termination Clause
Executive Chairman
Sean Taylor
Nil
Ongoing
Duration of the contract
is ongoing
At the commencement of his
employment, Mr Taylor was
issued a total of 10,800,000
service rights which will vest
in three equal tranches
subject to applicable vesting
condition. Refer to Note 15
for details
US$322,600
A$45,000 + 10.5%
superannuation
A$45,000 + 10.5%
superannuation
A$45,000 + 10.5%
superannuation
Mark Schuessler
Nick Bolton
John Patton
Scott Hobbs
Ongoing
Ongoing
Ongoing
Ongoing
14 days written notice.
Three months of base
salary as severance pay in
the event of termination
by the Company
Duration of the contract
is ongoing
Duration of the contract
is ongoing
Duration of the contract
is ongoing
Wayne Brekke
US$207,600
Ongoing
14 days written notice
Cynthia Thayer
US$222,600
Ongoing
14 days written notice
Managing Director
and Global Chief
Executive Officer
(Retired 24 July
2023)
Non-Executive
Director
Non-Executive
Director
Non-Executive
Director
Global Chief
Financial Officer
Global Chief
Marketing Officer
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(f)
(i)
Equity Instrument Disclosures relating to Key Management Personnel
Option Holdings
No options over ordinary shares in the Company were held during the financial year by any of
the KMP and their personally related parties.
(ii)
Rights Holdings
The number of performance rights and service rights in the Company held during the financial
year by each KMP, including their personally related parties, is set out in the following table.
Name
Directors
Mr S Taylor
Mr M Schuessler
Mr N Bolton
Mr J Patton
Mr S Hobbs
Senior Executives
Mr W Brekke
Ms C Thayer
Balance at
Start of
Year
(No)
10,800,000
-
-
-
-
-
-
Total
10,800,000
Granted as
Remuneration
Exercised
Lapsed/
Forfeited
Balance at End
of Year
(No)
(No)
(No)
(No)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,800,000
-
-
-
-
-
-
10,800,000
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DIRECTORS’ REPORT
REMUNERATION REPORT (audited) (continued)
(f)
Equity Instrument Disclosures relating to Key Management Personnel (continued)
(iii)
Share Holdings (Ordinary Shares)
The number of shares in the Company held during the financial year by each KMP, including their
personally related parties, is set out in the following table. No shares were granted during the
reporting year as compensation.
Name
Directors
Mr S Taylor
Mr M Schuessler
Mr N Bolton 2
Balance at
Start of
Year
(No)
1,375,212
1,208,248
-
Mr J Patton 3
26,526,643
Mr S Hobbs
Senior Executives
Mr W Brekke
Ms C Thayer
Total
-
-
-
29,110,103
Granted as
Remuneration
Acquisition
(No)
(No)
Exercise of
Options/
Rights
(No)
Other
Changes 1
Balance at
End of Year
(No)
(No)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,375,212
1,208,248
-
26,526,643
-
-
-
29,110,103
1
This movement refers to the shareholding of KMP at the commencement or resignation during the year.
Disclosure of a KMP’s equity holding is not required subsequent to his resignation.
2 Mr N Bolton disclosed in Appendix 3Y dated 12 May 2022 that he ceases to hold relevant interest in YOW
securities held by Keybridge Capital Limited pursuant to section 608(1) of the Corporations Act.
3 Mr Patton indirectly held 26,526,643 shares through Aurora Funds Management Limited in its capacity as
responsible entity for HHY Fund.
Loans to and other transactions with key management personnel
There were no loans outstanding or other transactions with key management personnel and
their related parties during the year ended 30 June 2023 (2022: Nil).
END OF AUDITED REMUNERATION REPORT
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DIRECTORS’ REPORT
INDEMNITY AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company maintained an insurance policy which indemnifies the
Directors and Officers of Yowie Group Limited in respect of any liability incurred in connection
with the performance of their duties as Directors or Officers of the Company to the extent
permitted by the Corporations Act 2001. The Company's insurers have prohibited disclosure of
the amount of the premium payable and the level of indemnification under the insurance
contract.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the Company or any related entity against a liability incurred by the
auditor.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the
year are outlined in Note 19 to the financial statements. The Directors are satisfied that the
provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s
independence as all non-audit services have been reviewed to ensure that they do not impact
the integrity and objectivity of the auditor and none of the services undermine the general
principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional & Ethical Standards Board.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 27 of the financial report.
Signed in accordance with a resolution of the Directors.
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Sean Taylor
Executive Chairman
31 August 2023
26 | Page
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Yowie Group Limited for the year ended 30 June 2023, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2023
TUTU PHONG
Partner
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THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Note
Consolidated
2023
US$
2022
US$
Sale of goods
Cost of sales
Gross profit
Selling and distribution
Marketing
Administration
Other income
Foreign exchange losses
Write-down of inventory
Reversal of plant and equipment impaired in prior years
Reversal of intangible assets impaired in prior years
(Loss)/profit before income tax
Income tax expense
5
4
10
11
12
6
13,285,268
(6,867,906)
6,417,362
15,605,658
(8,180,182)
7,425,476
(4,037,599)
(965,402)
(2,576,182)
153,869
(76,539)
(66,383)
1,052,115
-
(3,880,059)
(861,702)
(2,507,639)
2,718
(4,769)
(105,665)
650,000
124,898
(98,759)
(4,188)
843,258
(3,752)
(Loss)/profit after income tax for the year
(102,947)
839,506
Other comprehensive income for the year
Items that may be reclassified subsequently to profit or loss
Movement in foreign currency translation reserve
Total comprehensive (loss)/profit for the year
net of tax attributable to members of the Company
11,021
(125,727)
(91,926)
713,779
Profit per share attributable to members of the Company
Basic (loss)/profit per share (cents)
Diluted (loss)/profit per share (cents)
7
7
(0.05)
(0.05)
0.38
0.38
This consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes to the financial statements.
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28 | Page
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Total Current Assets
Non-Current Assets
Plant and equipment
Intangible assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Unearned income
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Note
Consolidated
2023
US$
2022
US$
16(a)
8
9
10
11
12
13
7,401,682
1,237,618
798,659
3,531,557
12,969,516
8,177,210
1,515,675
701,601
2,624,665
13,019,151
192,953
123,378
316,331
221,104
141,841
362,945
13,285,847
13,382,096
3,859,307
57,117
-
3,916,424
3,924,848
37,582
93,272
4,055,702
3,916,424
4,055,702
9,369,423
9,326,394
14(a)
14(d)
46,687,677
(90,060)
(37,228,194)
9,369,423
46,687,677
(236,036)
(37,125,247)
9,326,394
This consolidated statement of financial position should be read in conjunction
with the accompanying notes to the financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Note
Issued
capital
US$
Share-
based
payment
reserve
US$
Consolidated
Foreign
currency
translation
reserve
US$
Accumulated
losses
Total
US$
US$
Balance as at 1 July 2021
46,687,677
2,002,480
(2,230,879)
(37,964,753)
8,494,525
Profit for the year
Other comprehensive income
Foreign currency translation
Total comprehensive income
for the year
Transactions with owners
recorded directly in equity
Share-based payments
15(d)
-
-
-
-
-
-
-
-
839,506
839,506
(125,727)
-
(125,727)
(125,727)
839,506
713,779
118,090
-
-
118,090
Balance as at 30 June 2022
46,687,677
2,120,570
(2,356,606)
(37,125,247)
9,326,394
Balance as at 1 July 2022
46,687,677
2,120,570
(2,356,606)
(37,125,247)
9,326,394
Loss for the year
Other comprehensive income
Foreign currency translation
Total comprehensive income
for the year
Transactions with owners
recorded directly in equity
Share-based payments
15(d)
-
-
-
-
-
-
-
-
(102,947)
(102,947)
11,021
-
11,021
11,021
(102,947)
(91,926)
134,955
-
-
134,955
Balance as at 30 June 2023
46,687,677
2,255,525
(2,345,585)
(37,228,194)
9,369,423
This consolidated statement of changes in equity should be read in conjunction
with the accompanying notes to the financial statements.
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CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 30 JUNE 2023
Cash flow from operating activities
Receipts from customers
Other receipts
Payments to suppliers and employees
Interest received
Income taxes paid
Net cash flows (used in)/from operating activities
Cash flow from investing activities
Refund of deposit for plant and equipment
Payments for plant and equipment
Payments for intangible assets
Net cash outflows from/(used in) investing activities
Cash flow from financing activities
Return of capital
Payment of share issue transaction costs
Net cash outflows used in financing activities
Note
Consolidated
2023
US$
2022
US$
12,865,986
6
(14,343,326)
153,863
(4,188)
(1,327,659)
15,531,480
88
(15,486,950)
2,687
(3,752)
43,553
16(b)
719,794
(28,990)
(73,091)
617,713
-
(3,820)
(141,841)
(145,661)
-
-
-
-
-
-
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of foreign exchange movements
Cash and cash equivalents at end of the year
16(a)
(709,946)
8,177,210
(65,582)
7,401,682
(102,108)
8,408,157
(128,839)
8,177,210
This consolidated statement of cash flows should be read in conjunction
with the accompanying notes to the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
1.
CORPORATE INFORMATION
Yowie Group Limited (“the Company”) is a public company limited by shares incorporated
and domiciled in Australia, whose shares are publicly traded on the Australian Securities
Exchange.
These financial statements are presented in United States Dollars. The financial report
was authorised for issue by the Directors on 31 August 2023 in accordance with a
resolution of the Directors.
The nature of the operations and principal activities of the Company are described in the
Directors’ Report on page 10.
2.
BASIS OF PREPARATION
The financial statements are a general purpose financial report which has been prepared
in accordance with the requirements of the Corporations Act 2001 and Australian
Accounting Standards and Accounting Interpretations. The financial statements have
been prepared on a historical cost basis. Yowie Group Limited is a for-profit entity for the
purpose of preparing these financial statements.
The financial statements of the Group also comply with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
3.
SEGMENT REPORTING
The Group has only one reportable segment, which relates to the operations of its
confectionery business, with production carried out under a contract manufacturing
arrangement. The net result is presented on a consolidated basis. All non-current assets
are located in one geographical location, the United States of America.
Major customer information
The revenue from major customers set out below arises from the sale of Yowie chocolate
confectionery product.
Major customer
% of Total Net Sales
Consolidated
2023
US$
2022
US$
3,929,769
30%
4,807,878
31%
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
4. OTHER INCOME
Interest income
Other income
5.
ADMINISTRATION
Administration expenses include:
Employee benefits
Business development and travel
Legal, tax, listing, compliance and insurance
Share-based payments (refer to Note 15)
Depreciation and amortisation
Lawsuit settlement
Other administrative expenses
Consolidated
2023
US$
153,863
6
153,869
2022
US$
2,687
31
2,718
Consolidated
2023
US$
2022
US$
1,111,326
42,291
743,777
134,955
96,088
190,000
257,745
2,576,182
1,326,560
17,306
674,020
118,090
113,509
-
258,154
2,507,639
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
6.
TAXATION
(a)
The major components of income tax expense are:
Current income tax expense
Adjustments for current tax of prior periods
Total current tax expense
Deferred income tax
Decrease in deferred tax assets
Consolidated
2023
US$
2022
US$
4,188
-
4,188
-
-
3,752
-
3,752
-
-
Income tax expense reported in the statement of profit
and loss and other comprehensive income
4,188
3,752
(b)
The prima facie tax on operating loss differs from the income tax provided in the
accounts as follows:
(Loss)/profit from ordinary activities before tax
Prima facie tax (benefit)/expense on (loss)/profit
at 25%
Effect of different tax rates on overseas losses
DTA on overseas tax losses no longer available
Income tax benefit not recognised
Income tax expense
Consolidated
2023
US$
2022
US$
(98,759)
843,258
24,690
(201,930)
(162,394)
(335,446)
(4,188)
(210,815)
(1,173,058)
-
1,380,121
(3,752)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
6.
TAXATION (continued)
(c) Deferred income tax at 30 June relates to the following:
Deferred tax assets
Share issue and acquisition costs
Inventory
Intercompany loans – unrealised foreign exchange losses
Provisions and accruals
Revenue tax losses
Deferred tax assets used to offset deferred tax liabilities
Deferred tax assets not brought to account 1
Deferred tax liabilities
Plant and equipment
Other assets
Intercompany loans – unrealised foreign exchange gains
Deferred tax assets used to offset deferred tax liabilities
Consolidated
2023
US$
5,532
(18,984)
994,181
543,582
8,012,902
(875,588)
(8,661,625)
-
39,772
38,987
796,829
(875,588)
-
2022
US$
18,377
239,104
702,154
678,495
7,951,300
(645,826)
(8,943,604)
-
52,029
13,664
580,132
(645,825)
-
1 Deferred tax assets have not been brought to account to the extent that it is not probable within the
immediate future that taxable profits will be available against which deductible temporary differences
can be utilised. This also applies to deferred tax assets for unused tax losses carried forward.
The Group’s unrecognised tax losses in Australia of US$2,687,205 and Hong Kong of
US$3,410,432 are available for offset against future profits subject to continuing to meet
the relevant statutory tests. The Parent Company and its Australian subsidiary have
formed a tax consolidated group. Unrecognised tax losses in the US of US$1,915,265 can
be used for up to 20 years.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
7.
PROFIT OR LOSS PER SHARE
Classification of securities as ordinary shares
The Company has only one category of ordinary shares included in basic earnings per
share.
Classification of securities as potential ordinary shares
There are currently no securities to be classified as dilutive potential ordinary shares on
issue.
Weighted average number of ordinary shares used
in the calculation of basic and diluted earnings per
share
Basic and diluted (loss)/profit attributable to
ordinary equity holders of the parent
Consolidated
2023
Number
2022
Number
218,567,901
218,567,901
US$
US$
(102,947)
839,506
Basic and diluted (loss)/profit per share (cents)
(0.05)
0.38
8.
TRADE AND OTHER RECEIVABLES
Current
Trade debtors
GST receivable
Consolidated
2023
US$
1,232,267
5,351
1,237,618
2022
US$
1,507,816
7,859
1,515,675
Trade debtors generally have 30-day terms. GST receivables have repayment terms
applicable under the relevant government authority. No amounts are past due or
impaired. The maximum exposure to credit risk at the reporting date is the carrying
amount of each class of receivables mentioned above. The Group’s exposure to risks is
summarised in Note 22.
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36 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
9.
PREPAYMENTS
Current
Prepayments – raw materials
Prepayments – other
10.
INVENTORIES
Current
Raw materials
Work in progress
Finished goods
Allowance for disposal
Consolidated
2023
US$
598,429
200,230
798,659
2022
US$
532,806
168,795
701,601
Consolidated
2023
US$
1,823,380
81,260
1,943,322
(316,405)
3,531,557
2022
US$
2,239,550
2,393
639,751
(257,029)
2,624,665
(i)
(ii)
Inventories are valued at the lower of cost or net realisable value.
Inventories recognised as an expense to cost of sales during the year ended 30 June 2023
amounted to US$6,867,906 (2022: US$8,180,182).
(iii) Net write-downs (reversal of write-downs) of inventories to net realisable value during the
year ended 30 June 2023 amounted to US$66,383 (2022: US$105,665).
The Group recorded a large allowance for disposal during the year ended 30 June 2020 related
to outdated Yowie Series and other raw materials that had been deemed to have zero
realisable value. A portion of those materials were used in production during the year ended
30 June 2023 and 2022. Refer to Note 23(u) for key accounting estimate on allowance for
disposal of inventories.
Movement in the allowance for disposal of inventories is set out below.
Balance at the beginning of the year
Disposal
Reversal
Additional allowance
Balance at the end of the year
(257,029)
-
55,197
(114,573)
(316,405)
(568,175)
311,146
-
-
(257,029)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
11.
PLANT AND EQUIPMENT
Manufacturing plant and equipment
Cost
Accumulated depreciation
Accumulated impairment losses
Manufacturing plant and equipment under
construction
Cost
Accumulated impairment losses
Office equipment
Cost
Accumulated depreciation
Consolidated
2023
US$
4,080,756
(1,555,827)
(2,334,929)
190,000
2022
US$
4,089,521
(1,182,480)
(2,689,654)
217,387
-
-
-
18,447
(15,494)
2,953
730,509
(730,509)
-
17,015
(13,298)
3,717
Total plant and equipment
192,953
221,104
Movements in the carrying amount of each class are set out below.
Manufacturing plant and equipment
Balance at the beginning of the year
Additions
Disposal
Depreciation
Reversal of impairment1
Carrying amount at the end of the year
Manufacturing plant and equipment under
construction
Balance at the beginning of the year
Deposit refund
Disposal
Reversal of impairment
Carrying amount at the end of the year
217,387
27,512
(22,405)
(387,220)
354,726
190,000
-
(719,794)
-
719,794
-
-
-
-
(432,613)
650,000
217,387
-
-
(35,361)
35,361
-
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
11.
PLANT AND EQUIPMENT (continued)
Office equipment
Balance at the beginning of the year
Additions
Depreciation
Foreign exchange adjustment
Carrying amount at the end of the year
Total impairment and amounts written off
Reversal of impairment 1
Amounts written off
Consolidated
2023
US$
3,717
1,478
(2,242)
-
2,953
1,052,115
-
1,052,115
2022
US$
2,021
3,820
(2,112)
(12)
3,717
650,000
-
650,000
1 $0.72 million related to the refund for deposit on manufacturing equipment which was previously
impaired in FY2020. The remaining $0.33 million relates to the reversal of impairment on manufacturing
equipment which was recorded in FY2020 following the identification of impairment indicators during
that period. The Group was able to utilise the asset, resulting in the recognition of depreciation and
reversal of a portion of the impairment.
12.
INTANGIBLE ASSETS
Rights and licenses 1
Cost
Accumulated impairment losses
Software
Cost
Accumulated amortisation
Accumulated impairment losses
Product development 2
Cost
Accumulated amortisation
Consolidated
2023
US$
225,398
(225,398)
-
370,424
(302,310)
(68,114)
-
2022
US$
225,398
(225,398)
-
370,916
(302,802)
(68,114)
-
1,205,023
(1,081,645)
123,378
1,129,641
(987,800)
141,841
Total intangible assets
123,378
141,841
1 Rights and licenses relate to the Yowie trademark which management has assessed as having an indefinite
useful life.
2 Product development relates to capitalised costs associated with the development of Yowie collectables.
39 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
12.
INTANGIBLE ASSETS (continued)
Movements in the carrying amount of each class are set out below.
Product development
Balance at the beginning of the year
Additions
Amortisation
Reversal of impairment 1
Carrying amount at the end of the year
Total impairment and amounts written off
Reversal of impairment 1
Amounts written off
Consolidated
2023
US$
141,841
75,383
(93,846)
-
123,378
-
-
-
2022
US$
-
128,340
(111,397)
124,898
141,841
124,898
-
124,898
1
This relates to the reversal of impairment on product development which was recorded in FY2020
following the identification of impairment indicators during that period. The Group was able to utilise the
asset, resulting in the recognition of depreciation and reversal of a portion of the impairment.
13.
TRADE AND OTHER PAYABLES
Current
Trade payables and accruals
Rebate allowances 1
Other
Consolidated
2023
US$
1,369,096
2,491,092
(881)
3,859,307
2022
US$
1,284,898
2,638,197
1,753
3,924,848
1 Rebate allowances include estimated accrual for promotional discounts, prompt payment discounts and
spoilage of goods. Refer to Note 23(u) for key accounting estimate on rebate allowances.
Trade creditor amounts represent liabilities for goods and services provided to the Group
prior to the end of the financial year and which are unpaid. The amounts are unsecured
and are usually paid within 30 days of recognition. The Group’s exposure to risks is
summarised in Note 22.
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40 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
14.
ISSUED CAPITAL AND RESERVES
(a)
Issued capital
Ordinary shares, fully paid
(b) Movements in share capital
As at 1 July 2021
Conversion of rights
Share issue costs
As at 30 June 2022
Conversion of rights
Share issue costs
As at 30 June 2023
Consolidated
2022
US$
2021
US$
46,687,677
46,687,677
US$
46,687,677
-
-
46,687,677
-
-
46,687,677
Number
218,567,901
-
-
218,567,901
-
-
218,567,901
(c)
Terms and conditions of issued capital
Holders of ordinary shares are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at shareholders’ meetings.
In the event of winding up of the Company, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds of liquidation.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
14.
ISSUED CAPITAL AND RESERVES (continued)
(d) Nature and purpose of reserves
Share-based payment reserve
The share-based premium reserve is used to recognise the value of options, service rights
and performance rights issued as share-based payments.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising
from the translation balances of entities which have functional currency other than USD.
Share-based payment reserve
Foreign currency translation reserve
(e)
Capital management
Consolidated
2023
US$
2,255,525
(2,345,585)
(90,060)
2022
US$
2,120,570
(2,356,606)
(236,036)
When managing capital, management’s objective is to ensure the Group continues as a
going concern as well as to generate optimal returns to shareholders and benefits for
other stakeholders. Management also aims to maintain a capital structure that ensures
the lowest cost of capital available to the entity. The Company under the direction of
management may issue new shares to provide for future development activity. The Group
currently has no debt other than trade payables.
15.
SHARE-BASED PAYMENTS
(a) Weighted average exercise prices
There were neither movement in outstanding share-based payment options during the
year nor were there any outstanding share-based payment options at balance date.
(b)
Remaining contractual life
There were no share-based payment options outstanding as at 30 June 2023 (2022: nil).
The weighted average remaining contractual life for the share-based payment rights
outstanding as at 30 June 2023 was 3.44 years (2022: 4.44 years).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
15.
SHARE-BASED PAYMENTS (continued)
(c) Outstanding share options and rights under share-based payments
There were no share-based payment options outstanding as at 30 June 2023 (2022: nil).
Service rights outstanding at the end of the year have the following expiry date:
Type
Grant Date
Vesting Date
Expiry Date
Service rights
Service rights
Service rights
8 Dec 2021
8 Dec 2021
8 Dec 2021
8 Dec 2022
8 Dec 2023
8 Dec 2024
8 Dec 2026
8 Dec 2026
8 Dec 2026
Rights
30 June 2023
3,600,000
3,600,000
3,600,000
Rights
30 June 2022
3,600,000
3,600,000
3,600,000
(d)
Expenses arising from share-based payment transactions
The share-based payments expense for the year is US$134,955 (2022: US$118,090). The
Group recognises the share-based payments expense over the vesting period for any
options and rights granted.
Rights issued to KMPs
Consolidated
2023
US$
134,955
2022
US$
118,090
Options and rights issued to KMPs, other employees and consultants were issued as
remuneration for future services. The Group fair valued the instruments granted.
(e)
Fair values
No new rights or options were issued during the year ended 30 June 2023.
The weighted average fair value of options and rights granted during the year ended 30
June 2023 was nil (2022: A$0.044).
Management has estimated that all rights are expected to vest during the vesting period.
The following tables list the inputs to the models used for the valuation of options and
rights issued during the year ended 30 June 2022.
Number of securities
Exercise price (A$)
Grant date
Expiry date
Share price at grant date (A$)
Expected volatility
Risk-free rate
Fair value per security (A$)
Valuation method
Service Rights
10,800,000
-
8 Dec 2021
8 Dec 2026
0.044
88%
0.55%
0.044
Binomial
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
16.
CASH FLOW RECONCILIATION
(a)
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash
at bank and deposits at call.
Cash and cash equivalents at the end of the year as shown in the statement of cash flow
are reconciled to the related item in the statement of financial position as follows:
Cash at bank
Short-term deposits
Consolidated
2023
US$
1,335,030
6,066,652
7,401,682
2022
US$
7,625,850
551,360
8,177,210
(b)
Reconciliation of operating profit after income tax to net cash (used in)/from
operating activities
Operating (loss)/profit after income tax
Adjusted for:
Depreciation and amortisation as per profit or loss
Depreciation and amortisation in cost of sales and
closing inventories
Share-based payments
Foreign exchange loss
Write-down of inventory
Loss on disposal of asset
Reversal of impairment of non-current asset
Changes in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
(Increase)/decrease in inventories
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Increase/(decrease) in unearned revenue
Net cash (used in)/from operating activities
Consolidated
2023
US$
(102,947)
2022
US$
839,506
96,088
113,509
387,220
134,955
76,539
66,383
22,404
(1,074,519)
278,057
(97,058)
(973,274)
(67,770)
19,535
(93,272)
(1,327,659)
432,613
118,090
2,967
105,665
-
(774,898)
159,058
198,945
(1,735,311)
483,466
6,671
93,272
43,553
(c) Non-cash investing and financing activities
During the year there were no reportable non-cash financing and investing activities.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
17. RELATED PARTY DISCLOSURES
(a)
Compensation of key management personnel
Short-term benefits
Post-employment benefits
Share-based payments expensed
Consolidated
2023
US$
843,691
9,543
134,955
988,189
2022
US$
925,629
10,783
118,090
1,054,502
(b) Other transactions with key management personnel
There are no other transactions with key management personnel.
18. COMMITMENTS AND CONTINGENCIES
(a) Commitments
The Group entered into merchandising agreements with BBC Studios, AFL and NRL.
Future minimum guaranteed royalty fees are as follows:
Within one year
After one year but not more than five years
More than five years
(b)
Contingencies
Consolidated
2023
US$
172,000
735,000
-
907,000
2022
US$
-
-
-
-
Yowie North America Inc. (“YNA”), a wholly owned subsidiary of the Group, has previously
brought claims against Whetstone Chocolate Factory (“WCF”) and Atlantic Candy
Company (“ACC”) for the release and return of the RASCH “Type FI” wrapping machine
(“Wrapper”) owned by the Group and located at ACC’s facility, as well as for monetary
damages. YNA negotiated a settlement agreement with ACC for the release and return of
the wrapper and the wrapper has been returned.
In this same case (which has, since the last report, been consolidated with the other
pending Florida state court action), ACC, Whetstone Industries (“WI”), and Henry M.
Whetstone, Jr. (“Whetstone”) have filed counterclaims against YNA alleging that YNA
breached the Manufacturing Agreement, the Patent Agreement, violated the Florida
Uniform Trade Secrets Act (“FUTSA”), breached fiduciary duties owed to WI and ACC, and
fraudulently induced ACC, WI, and Whetstone to enter into amendments to the
Manufacturing and Patent Agreements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
18.
COMMITMENTS AND CONTINGENCIES (continued)
(b)
Contingencies (continued)
For its claim of the breach of the Manufacturing Agreement, ACC and WI (as the purported
successor-in-interest to the Manufacturing Agreement) allege that the Manufacturing
Agreement was a requirements contract that required YNA to manufacture with ACC and
WI until the agreement expired in 2027; however, YNA believes this is inconsistent with
the plain language in the Manufacturing Agreement which only requires YNA to
manufacture with ACC and WI when YNA is using Whetstone’s patents to produce its
chocolate and toy combination products.
For its claim for breach of the Patent Agreement, Whetstone alleges that YNA owes him
royalty fees from that time until 2027 under the Patent Technology and License
Agreement regardless of whether the Company uses Whetstone’s patent. Because the
Company is no longer using Mr. Whetstone’s (now expired) patent in its manufacturing
process (and hasn’t for several years), it believes that there is no legal basis under YNA’s
contract with Mr. Whetstone to pay him any royalty. For its FUTSA claim, WI and ACC
claim that YNA impermissible appropriated the technology from its manufacturing line to
start its line with Madelaine. YNA rejects this as false and notes that the manufacturing
line used at Madelaine is much newer and modern than WI’s and ACC’s manufacturing
lines. For its breach of fiduciary duty claim, WI and ACC claim that YNA owed fiduciary
duties to them, but this is inconsistent with Florida law which does not apply fiduciary
duties in situation like these. Finally, for its fraudulent inducement claim, there is no
support for any claim that YNA (or any of its agents) acted to coerce WI and ACC to enter
into any amendment agreements.
Both parties filed and argued cross-motions for summary judgment on issues related to
the Patent Agreement in October 2017. On 13 September 2018, the Court entered an
order denying both parties motions for summary judgment. On 8 July 2022, the parties
agreed to dismiss WI’s and Whetstone’s FUTSA, fiduciary duty, and fraudulent
inducement claims. YNA filed a second motion for summary judgment on the remaining
claims on 14 June 2022. This motion was denied on 3 August 2022. A trial was set for
August 2022, but was continued by the Court to 29 November 2022 and 1 December 2022.
The trial proceeded on those dates and the Court ordered post-trial briefing which was
completed in January 2023.
On 7 February 2023, the Court entered its Verdict Following Non-Jury Trial. The Verdict
found in YNA’s favour on all claims brought by Whetstone pursuant to the Patent
Agreement and awarded Whetstone no damages. On WI’s Manufacturing Agreement
claims, the Court rejected all of WI’s claims that YNA was required to manufacture with
WI for the duration of the Manufacturing Agreement and pay fixed costs and lost profits
to WI. The Court did find that YNA owed WI payment on two invoices that were left unpaid
for the time period in which YNA was still manufacturing with WI. These invoices total
$114,579.97 with prejudgment interest at 9% per annum. Pursuant to the Court’s
direction, a Final Judgment was executed by the parties 22 March 2023. WI and
Whetstone subsequently filed a notice of appeal of this Final Judgment on 21 April 2023,
and YNA filed a cross-appeal of the Final Judgment on 08 May 2023.
46 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
18.
COMMITMENTS AND CONTINGENCIES (continued)
(b)
Contingencies (continued)
The Court has not given a timeline on when it will rule on the pending motion for
attorney’s fees. The Court has indicated it will defer ruling on the amount of attorney’s
fees and costs (if any) until the appeal is concluded. On the appeal, YNA expects that
briefing will conclude by the end of 2023 and a ruling will occur sometime in Q2 or Q3
2024. For all the above causes of action, YNA has disclaimed liability and is defending the
action. YNA considers no additional provision is warranted in relation to this counterclaim.
Management is not able to reliably estimate the ultimate settlement amounts at this time
nor does management believe any material payments would be made as a result of these
cases, and therefore no provision in relation to the claim has been recognised in the
financial statements. The Company will incur ongoing legal costs due to these cases.
However, due to inherent uncertainties, no accurate quantification of any cost, or timing
of such cost, which may arise from the legal proceedings, no provision has been made for
legal costs.
19. AUDITOR’S REMUNERATION
The auditor of the Group is RSM Australia (2022: RSM Australia).
Amounts received or due and receivable:
RSM Australia
Audit and review of financial reports
Consolidated
2023
US$
2022
US$
59,286
53,910
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
20.
PARENT ENTITY AND SUBSIDIARY INFORMATION
(a)
Parent Entity Financial Information (Yowie Group Limited)
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total equity
2023
US$
3,571,893
500,824
4,072,717
149,610
-
149,610
2022
US$
1,256,845
4,196,972
5,453,817
118,952
-
118,952
3,923,107
5,334,865
48,257,987
(5,663,138)
(38,671,742)
3,923,107
48,257,987
(4,678,566)
(38,244,556)
5,334,865
Loss of the parent entity
Total comprehensive loss of the parent entity
(427,186)
(1,546,714)
(519,537)
(3,277,749)
(b)
Commitment and Contingencies of the Parent Entity
The parent entity had no contingent liabilities as at 30 June 2023 or 30 June 2022. Refer
to Note 18 for a discussion of commitments of the parent entity and the contingencies
of the Group.
(c)
Subsidiaries
Name
Country of Incorporation
Yowie Enterprises Pty Ltd
Yowie North America, Inc.
Yowie Natural World, Inc.
Yowie Hong Kong Holdings Limited
Australia
USA
USA
Hong Kong (China)
Percentage Interest
2022
%
100
100
100
100
2023
%
100
100
100
100
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48 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
21.
SUBSEQUENT EVENTS
• On 24 July 2023, Mr Mark Schuessler retired from his position as Managing Director
and Global CEO. The Board would like thank Mr Schuessler for his tenure.
• The Group entered into merchandising agreements with BBC Studios, AFL and NRL.
Refer to Note 18(a) for disclosure on future minimum guaranteed royalty fees.
• Subsequent to year end, the Group entered into a binding Asset Purchase Agreement
with the administrators of Chocolate and Confectionary Company Pty Limited to
acquire the assets of the Ernest Hillier chocolate business for A$375,000.
Yowie is acquiring all the owned plant and equipment and all the IP of Ernest Hillier,
including all business names and brands of the Ernest Hillier chocolate business, and is
to enter into new leases for the premises and obtaining either new leases or
assignments in respect of leased plant and equipment used by Ernest Hillier. Yowie is
not assuming any of the existing liabilities of the sellers.
Apart from the matters discussed above, no other matter or circumstance has arisen since
30 June 2023 that has significantly affected, or may significantly affect the Group’s
operations, the results of those operations, or the Group’s state of affairs in future
financial years.
22.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and cash equivalents,
receivables and payables.
The net fair values of the financial assets and liabilities at reporting date of the Group
approximate the carrying amounts in the financial statements, except where specifically
stated.
The Group manages its exposure to key financial risks, including interest rate, foreign
currency risk, credit risk and liquidity risk in accordance with the Group’s financial risk
management policy. The objective of the policy is to support the delivery of the Group’s
financial targets whilst protecting future financial security.
The main risks arising from the Group's financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk. The Group uses different methods to measure
and manage different types of risks to which it is exposed. These include monitoring levels
of exposure to interest rate and foreign exchange risk and assessments of market
forecasts for interest rate and foreign exchange rates. Liquidity risk is monitored through
the development of future rolling cash flow forecasts.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
22.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
The Board reviews and agrees policies for managing each of these risks as summarised
below.
Primary responsibility for identification and control of financial risks rests with the Board.
The Board reviews and agrees policies for managing each of the risks identified below.
Risk exposures and responses
Interest rate risk
The Group's exposure to market interest rates relates primarily to the Group’s cash and
short-term deposits.
At reporting date, the Group had the following financial assets exposed to Australian
variable interest rate risk that are not designated in cash flow hedges:
Consolidated
Cash at bank
2023
US$
6,252,272
2022
US$
596,403
The following sensitivity analysis is based on the interest rate risk exposures in existence
at the reporting date.
At reporting date, if interest rates had moved as illustrated in the table below, with all
other variables held constant, post tax profit and equity would have been affected as
follows:
Post tax profit
Higher / (lower)
Equity
Higher / (lower)
2023
US$
156,307
(156,307)
2022
US$
14,910
(14,910)
2023
US$
156,307
(156,307)
2022
US$
14,910
(14,910)
+2.5% (2022: +2.5%)
-2.5% (2022: -2.5%)
The movements are due to higher or lower interest revenue from cash balances. A
sensitivity of 2.5% is considered reasonable given the current level of both short term and
long term Australian Dollar interest rates.
Foreign currency risk
As a result of the Australian entities having a functional currency in Australian Dollar which
is different to the Group’s presentation currency of US Dollar, the Group’s statement of
financial position can be affected significantly by movements in the Australian Dollar/US
Dollar exchange rate.
The Group also has transactional currency exposures. Such exposure arises from sales or
purchases by an operating entity in currencies other than the functional currency.
50 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
22.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Risk exposures and responses (continued)
Operational transactions are denominated in US Dollar. The Group’s approach is to target
specific levels at which to convert Australian Dollar to United States Dollar by entering
into either spot or short term forward exchange contracts. The Group does not enter into
transactions that qualify as hedging for hedge accounting purposes, with the exception of
a number of spot and short term forward exchange contracts in relation to working capital
management.
The financial assets and liabilities of the US and Hong Kong subsidiaries are held in the
functional currency of these subsidiaries, which is US Dollar.
At 30 June, the US Dollar equivalence of assets and liabilities held in Australian Dollar and
subject to foreign exchange risk are as follows:
Consolidated
Assets and liabilities of entities with AUD functional
currencies
Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total Assets
Liabilities
Trade and other payables
Provisions
Total Liabilities
2023
US$
2022
US$
3,551,031
5,352
45,445
3,601,828
92,492
57,117
149,609
1,233,068
7,860
-
1,240,928
81,369
-
81,369
Intercompany loans are denominated in Australian Dollar and US Dollar. These loans are
eliminated upon consolidation.
At 30 June, the effects on post tax profit or loss and equity from a change in the Australian
Dollar/US Dollar exchange rate would be as follows:
Profit or loss
Higher / (lower)
Equity
Higher / (lower)
2023
US$
2022
US$
2023
US$
2022
US$
Exchange Rate +10% (2022: +10%)
Exchange Rate -10% (2022: -10%)
-
-
-
-
(313,837)
313,837
(105,415)
105,415
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51 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
22.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Risk exposures and responses (continued)
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash
equivalents and trade and other receivables. The Group's exposure to credit risk arises
from potential default of the counter party, with a maximum exposure equal to the
carrying amount of these instruments.
The Group does not hold any credit derivatives to offset its credit exposure. It holds its
cash deposits with major banks with high credit ratings.
Cash at bank and short-term bank deposits
AAA rated banks
AA rated banks
A rated banks
Liquidity risk
Consolidated
2023
US$
-
6,378,035
1,023,647
7,401,682
2022
US$
-
1,261,650
6,915,560
8,177,210
Liquidity risk is the risk that the Group may encounter difficulty in meeting its financial
obligations. The Group’s objective is to maintain adequate funding to meet its needs,
currently represented by cash and short-term deposits sufficient to meet the Group’s
current cash requirements.
Maturity analysis for financial liabilities
Within one year
Between one and five years
Consolidated
2023
US$
3,859,307
-
3,859,307
2022
US$
3,924,848
-
3,924,848
Contractual cash flows for financial liabilities are the same as carrying value.
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52 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) New and amended accounting standards adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations,
including amendments to the existing standards issued by the Australian Accounting
Standards Board (the AASB) that are relevant to their operations and effective for the
current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
(b) New accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or
amended but are not yet mandatory, have not been early adopted by the Group for the
annual reporting period ended 30 June 2023. The Group has not yet assessed the impact
of these new or amended Accounting Standards and Interpretations.
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53 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Yowie Group
Limited and its subsidiaries (“the Group”) as at 30 June 2023.
Subsidiaries are entities over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from their activities. The existence and effect
of potential voting rights that are currently exercisable or convertible are considered
when assessing whether the group controls another entity.
The financial statements of the subsidiaries are prepared for the same reporting period
as the parent company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profits and losses resulting from intra-group
transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is obtained by the
Group and cease to be consolidated from the date on which control is transferred out of
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of
accounting. The acquisition method of accounting involves recognising at acquisition
date, separately from goodwill, the identifiable assets acquired, the liabilities assumed
and any non-controlling interest in the acquiree. The identifiable assets acquired and the
liabilities assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of consideration (including the
fair value of any pre-existing investment in the acquiree) is goodwill or discount on
acquisition.
Non-controlling interests not held by the Group are allocated their share of net profit after
tax in the statement of profit or loss and other comprehensive income and are presented
within equity in the consolidated statement of financial position, separately from parent
shareholders’ equity.
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54 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Foreign currency translation
Functional and presentation currency
The functional currency of Yowie Group Limited and Yowie Enterprises Pty Ltd is
Australian Dollar (AUD). The functional currency of the other entities is United States
Dollar (USD).
The presentation currency of Yowie Group Limited is United States Dollar (USD).
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by
applying the exchange rates ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the rate of exchange
ruling at the reporting date.
All exchange differences in the consolidated financial report are taken to the statement
of profit or loss and other comprehensive income.
Group companies
The results and financial position of foreign operations (none of which has the currency
of a hyperinflationary economy) that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each statement of financial position presented are
translated at the closing rate at the date of that statement of financial position;
• income and expenses for each statement of profit or loss and other comprehensive
income are translated at average exchange rates, unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the
transactions; and
• all resulting exchange differences are recognised in the statement of profit or loss
and other comprehensive income.
(e)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank
and in hand and short-term deposits with an original maturity of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of outstanding bank overdrafts. Bank
overdrafts are included within interest-bearing loans and borrowings in current liabilities
on the statement of financial position.
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55 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Trade and other receivables
Trade receivables, which generally have 30-60 day terms, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest method,
less an allowance for any uncollectible amounts. Refer to Note 23(q) for details on
assessment of uncollectible amounts.
(g)
Inventories
Inventories are measured at the lower of cost or net realisable value. Raw material
inventories are accounted for at purchase cost on a weighted average cost basis. Finished
goods and work in progress are accounted for at the purchase cost of direct materials plus
manufacturing costs, including depreciation of manufacturing equipment. Net realisable
value is the estimated selling price in the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to make the sale.
(h)
Property, plant and equipment
Plant and equipment is stated at cost, less accumulated depreciation and accumulated
impairment losses.
The carrying amount of plant and equipment is reviewed annually to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed
on the basis of the expected net cash flows that will be received from the assets
employment and subsequent disposal. The expected net cash flows have been discounted
to their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to profit or loss during the financial period in
which they are incurred.
Depreciation is calculated over the useful lives to the Group of the assets, commencing
from the time the asset is held ready for use, as follows:
Class
Manufacturing plant and equipment
Office equipment
Depreciation method
Units of production basis
Straight line basis over 2.5 years
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost.
Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses. Internally generated intangible assets,
excluding capitalised development costs, are expensed to profit and loss as incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed
for impairment whenever there is an indication that the intangible asset may be impaired.
Rights and licenses
The Group made cash payments to purchase rights and licenses and they are valued at
cost. They are assessed as having an indefinite useful life.
Product development
Expenditure on product development is recognised as an intangible asset when the Group
can demonstrate:
• the technical feasibility of completing the intangible asset so that it will be available
for use or sale
• its intention to complete and its ability to use or sell the asset
• how the asset will generate future economic benefits
• the availability of resources to complete the asset
• the ability to reliably measure expenditure during development.
Product development costs are recorded as intangible assets and amortised using the
units of production method from the point at which the asset is available for use.
Software
Costs associated with maintaining software programmes are recognised as an expense as
incurred.
Development costs that are directly attributable to the design and testing of identifiable
and unique software products controlled by the group are recognised as intangible assets
when the following criteria are met:
• it is technically feasible to complete the software so that it will be available for use
• management intends to complete the software and use or sell it
• there is an ability to use or sell the software
• it can be demonstrated how the software will generate probable future economic
benefits
• adequate technical, financial and other resources to complete the development
and to use or sell the software are available, and
• the expenditure attributable to the software during its development can be reliably
measured.
57 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
Intangible assets (continued)
Other directly attributable costs that are capitalised as part of the software include
employee costs and an appropriate portion of other directly attributable costs.
Software costs are recorded as intangible assets and amortised from the point at which
the asset is available for use over 3 years.
(j)
Trade and other payables
Trade payables and other payables are carried at amortised cost. They represent liabilities
for goods and services provided to the Group prior to the end of the financial year that
are unpaid and arise when the Group becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured and are
usually paid within 30 days of recognition.
(k)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the
expenditure required to settle the present obligation at the reporting date. If the effect
of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects the time value of money and the risks specific to the liability.
(l)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(m) Revenue recognition
The Group recognises revenue predominately from the sale of goods.
Sale of goods
Revenue is recognised when control of the product is transferred, being either when the
product is delivered to the customer or, in some instance, when the customer picks up
the product, and there is no unfulfilled obligation that could affect the customer’s
acceptance of the products.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Revenue recognition (continued)
Revenue from sales is recognised based on the arrangement between the customer and
the Group. The arrangements in place do not commit customers to purchasing a specified
quantity nor commit Yowie to deliver the same, but set out the terms and conditions that
apply between the parties at the time an order is placed by a customer and accepted by
the Group. The terms and conditions cover, as appropriate to the customer, pricing,
settlement of liabilities, rebate allowances and any other negotiated performance
obligations.
The rebate allowances relate to the customers right to claim promotional discounts and
spoilage of goods. At the point of sale, promotional discounts, spoilage allowance and
corresponding adjustment to revenue is recognised for those allowances expected to be
claimed by customers. The Group uses its accumulated historical experience and,
whenever available, mutually agreed terms to estimate the rebate allowances on a per
customer basis.
No element of financing is present in the pricing arrangement. Settlement terms are
generally credit terms of 30 to 60 days. Terms reflect negotiations with customers,
policies, procedures and controls held by each business unit as it relates to customer
credit risk. For customers who purchase on credit, a receivable is recognised when the
products are delivered or picked up as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
Interest revenue
Revenue is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest
revenue over the relevant period using the effective interest rate, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial
asset to the net carrying amount of the financial asset.
(n)
Income tax and other taxes
Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities based on the
current period’s taxable income. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the reporting date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Income tax and other taxes (continued)
Deferred income tax is provided on all temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill
or of an asset or liability in a transaction that is not a business combination and
that, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; or
• when the taxable temporary difference is associated with investments in
subsidiaries, associates or interests in joint ventures, and the timing of the reversal
of the temporary differences can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax credits and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences and
the carry-forward of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in
subsidiaries, associates or interests in joint ventures, in which case a deferred tax
asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available
against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profit will allow
the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected
to apply to the year when the asset is realised or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Income tax and other taxes (continued)
Current and deferred income tax is recognised in the statement of financial position,
except to the extent that it relates to items recognised in other comprehensive income or
direct in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity respectively.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same taxation authority.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST,
unless the GST incurred is not recoverable from the taxation authority. In this case, it is
recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST recoverable or
payable. The net amount of GST recoverable from, or payable to, the taxation authority
is included with other receivables or payables in the statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis. The
GST components of cash flows arising from investing and financing activities which are
recoverable from or payable to taxation authorities are classified as operating cash flows.
(o)
Share-based payment transactions
The Group provides benefits to directors, employees and consultants in the form of share-
based payment transactions, whereby services are rendered in exchange for shares or
rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with directors, employees and consultants is
measured by reference to the fair value at the date at which they are granted. The fair
value is determined using an appropriate valuation model.
No expense is recognised for awards that do not ultimately vest, except for equity-settled
transactions for which vesting is conditional upon a market or non-vesting condition.
These are treated as vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and/or service conditions are
satisfied.
The cost of equity-settled transactions is recognised, together with a corresponding
increase in equity, over the period in which the performance and/or service conditions
are fulfilled.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(o)
Share-based payment transactions (continued)
If the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified. An additional expense is recognised for
any modification that increases the total fair value of the share- based arrangement, or is
otherwise beneficial to the recipient, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised
immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the
previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution
in the computation of diluted loss per share.
(p)
Earnings / loss per share
Basic earnings / loss per share is calculated as net profit or loss attributable to members
of the parent entity, adjusted to exclude any costs of servicing equity (other than
dividends), divided by the weighted average number of ordinary shares of the Company,
adjusted for any bonus element.
Diluted loss per share is calculated as net profit or loss attributable to members of the
parent, adjusted for:
• costs of servicing equity (other than dividends);
• the after tax effect of dividends and interest associated with dilutive potential
ordinary shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that
would result from the dilution of potential ordinary shares.
divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
(q)
Financial instruments
Financial assets
AASB 9 has three classification categories for financial assets; amortised cost, fair value
through other comprehensive income (FVOCI) and fair value through profit or loss.
The classification is based on the business model under which the financial asset is
managed and its contractual cash flows. Compared to AASB 139, the FVOCI and amortised
cost categories have been added and the held-to-maturity, loans and receivables and
available for sale classification categories have been removed. The Group only have
financial assets measured at amortised cost.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
Financial instruments (continued)
Amortised cost
A financial asset is measured at amortised cost if both of the following conditions are met:
the financial asset is held within a business model whose objective is to hold
(i)
financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash
flows that meet the sole payment of principal and interest (SPPI) requirements.
(ii)
Impairment of financial assets
The Group assesses on a forward looking basis the expected credit losses associated with
its debt instruments carried at amortised cost. The impairment methodology applied
depends on whether there has been a significant increase in credit risk. For trade
receivables, contract debtors and lease receivables, the Group applies the simplified
approach permitted by AASB 9, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.
Financial liabilities
AASB 9 largely retains the existing requirements of AASB 139 for the classification and
measurement of financial liabilities. Financial liabilities are measured at amortised cost,
except for those financial liabilities that are designated to be measured at fair value
through profit or loss.
Trade and other payables
Liabilities are recognised for amounts to be paid for goods or services received. Trade
payables are settled on terms aligned with the normal commercial terms in operations.
(r)
Impairment of assets
At each reporting date, the Group reviews the carrying values of tangible assets and
intangible assets to determine whether there is any indication that those assets have been
impaired. If such an indication exists, the recoverable amount of the asset, being the
higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s
carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit to which the asset
belongs.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(s)
Segment disclosures
Operating segments are presented in a manner consistent with the management reports
provided to the chief operating decision makers, which are currently represented by the
full Board.
The Group has only one reportable segment, which relates to the operations of its
confectionery business. All production and sales to date have taken place in the United
States, with production carried out under a contract manufacturing arrangement. The net
result is presented on a consolidated basis.
(t)
Government grants
Government grants are not recognised until there is reasonable assurance that the Group
will comply with the conditions attaching to them and that the grants will be received.
A forgivable loan from government is treated as a government grant when there is
reasonable assurance that the Group will meet the terms for forgiveness of the loan.
Government grants are recognised in profit or loss on a systematic basis over the periods
in which the Group recognises as expenses the related costs for which the grants are
intended to compensate.
(u)
Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management
to make judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management bases its judgements and estimates on historical
experience and on other factors it believes to be reasonable under the circumstances.
Actual results may differ from these estimates under different assumptions and
conditions and may materially affect financial results or the financial position reported in
future periods.
Management has identified the following critical accounting policies for which significant
judgements, estimates and assumptions are made.
Share-based payments
The Group measures the cost of equity-settled transactions by reference to the fair value
of the equity instruments at the date at which they are granted. Estimating fair value for
share-based payment transactions requires determining the most appropriate valuation
model, which is dependent on the terms and conditions of the grant. The estimate also
requires making assumptions about the most appropriate inputs to the valuation model,
including the expected life of the share option, volatility and dividend yield. The
assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in Note 15.
64 | Page
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
23.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u)
Significant accounting judgements, estimates and assumptions (continued)
Income taxes
Judgement is required in assessing whether deferred tax assets are recognised in the
statement of financial position. Deferred tax assets are recognised only when it is
considered more likely than not that they will be recovered, which is dependent on the
generation of sufficient future taxable profits. Assumptions about the generation of
future taxable profits depend on management’s estimates of future cash flows.
Judgements are also required about the application of income tax legislation.
Allowance for disposal of inventories
The allowance for disposal of inventories assessment requires a degree of estimation and
judgement. The level of the allowance is assessed by taking into account the recent sales
experience, the ageing of inventories, future production plans and their alignment with
the remaining term of any applicable contract manufacturing agreements, as well as any
and other factors that affect inventory obsolescence. To the extent that these judgements
and estimates prove incorrect, the Group may be exposed to potential additional
inventory write-downs or reversals in future periods.
Rebate allowances
The rebate allowances relate to the customers right to claim promotional discounts and
spoilage of goods. At the point of sale, promotional discounts, spoilage allowance and
corresponding adjustment to revenue is recognised for those allowances expected to be
claimed by customers. The Group uses its accumulated historical experience and,
whenever available, mutually agreed terms to estimate the rebate allowances on a per
customer basis.
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DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Yowie Group Limited, I state that:
1.
In the opinion of the Directors:
(a)
the financial statements and notes of the consolidated entity are in accordance with
the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at
30 June 2023 and of its performance for the year ended on that date; and
complying with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
(b)
there are reasonable grounds to believe that the consolidated entity will be able to
pay its debts as and when they become due and payable.
2.
This declaration has been made after receiving the declarations required to be made to
the directors in accordance with section 295A of the Corporations Act 2001
Note 2 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
On behalf of the Board
Sean Taylor
Executive Chairman
31 August 2023
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RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
YOWIE GROUP LIMITED
Opinion
We have audited the financial report of Yowie Group Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Revenue
Revenue was considered a key audit matter as it is the
most significant account balance in the statement of
profit or loss and other comprehensive income.
For the year ended 30 June 2023, the Group
recognised revenue from the sale of goods of
$13,285,268.
Significant judgement is required in determining the
timing of revenue recognition, given the shipping
terms, and the related timing of when control passes
to the end customer.
We performed the following audit procedures, amongst
others, in relation to the recognition of revenue:
ꞏ Assessed whether the revenue recognition policies
in compliance with Australian Accounting
are
Standards;
ꞏ Evaluated and tested the operating effectiveness of
the Group’s controls related to revenue recognition;
ꞏ Performed substantive analytical review procedures.
The substantive analytical review involved setting
expectations of revenue and gross profit margins by
using historical data and budgets;
ꞏ Sampled a selection of sales invoices and delivery
documentation to address the risks of occurrence and
accuracy of the revenue recognised; and
ꞏ Reviewed sales transactions before and after the
reporting date to ensure that revenue is recognised in
the correct financial period.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of Yowie Group Limited, for the year ended 30 June 2023, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
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RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 31 August 2023
TUTU PHONG
Partner
ASX ADDITIONAL INFORMATION
Additional information as required by the Australian Securities Exchange Listing Rules and not
disclosed elsewhere in this report is set out below. This information is current as at 23 August
2023.
Distribution of Quoted Securities
Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 – 100,000
100,000 and over
Total
No. of Holders of
Ordinary Shares
1,027
492
231
514
134
No. of
Ordinary Shares
253,670
1,383,906
1,851,969
17,900,859
197,177,497
2,398
218,567,901
There were 1,912 shareholders holding less than a marketable parcel of ordinary shares.
Quoted and Unquoted Equity Securities
Equity Security
Ordinary shares
Service rights
Exercise price: Nil
Expiry date: 8 Dec 2026
Quoted
218,567,901
-
Unquoted
-
10,800,000
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ASX ADDITIONAL INFORMATION
Unlisted Employee/Consultant Options/Rights
Exercise Price
Nil
Expiry Date
8 Dec 2026
Service Rights
10,800,000
No. of Holders
1
Holder: Systems Update Pty Ltd
Twenty Largest Holders of Ordinary Shares
Name
Keybridge Capital Limited
Abdullah Hani Abdallah
BNP Paribas Nominees Pty Ltd
Reash Pty Ltd
Keybridge Capital Limited
Keybridge Capital Limited
Recruitment Investments Pty Ltd
Scarborough Equities Pty Ltd
Citicorp Nominees Pty Ltd
Bentley Capital Limited
1
2
3
4
5
5
6
7
8 Mr Keith Phillip Hudson & Mrs Ann Hudson
9
10
11 Mr Ian Morton & Mrs Deborah Morton
4F Investments Pty Ltd
12
Kamga Pty Ltd
13
Patricia Mary Fields
14
Dr Gregory Bryan Makin
15
Agri Export Australia Pty Ltd
16
17
Systems Update Pty Ltd
18 Mr Keith Phillip Hudson
19 Mark Schuessler
20
Talal Adel Hammoud
TOTAL
Shares Held
27,386,280
22,460,496
17,127,903
16,998,394
11,243,150
11,243,150
10,556,993
9,956,110
7,423,661
6,423,799
5,666,667
5,259,001
2,709,604
2,300,000
2,000,000
1,757,027
1,448,689
1,375,212
1,285,032
1,208,248
1,144,280
166,973,696
Percentage
%
12.53
10.28
7.84
7.78
5.14
5.14
4.83
4.56
3.40
2.94
2.59
2.41
1.24
1.05
0.92
0.80
0.66
0.63
0.59
0.55
0.52
76.39
Substantial Shareholders
Substantial shareholders who have notified the Company in accordance with section 671B of
the Corporations Act 2001 are as follows:
Shareholder
in
Aurora Funds Management Limited
responsible entity of HHY Fund
Bentley Capital Limited
Keybridge Capital Limited
Orion Equities Limited
Queste Communications Ltd
Reash Pty Ltd
Recruitment Investments Pty Ltd
Scarborough Equities Pty Ltd
Wilson Asset Management Group
No. of Shares
Percentage
%
its capacity as
26,526,643
12.14
21,199,260
77,836,436
21,199,260
21,199,260
22,460,496
11,243,150
21,199,260
77,836,436
9.70
35.61
9.70
9.70
10.28
5.14
9.70
35.61
71 | Page
ASX ADDITIONAL INFORMATION
Voting Rights
Ordinary shares carry one vote per share. There are no voting rights attached to the options in
the Company.
Stock Exchange
The Company is listed on the Australian Securities Exchange and has been allocated the code
“YOW”. The “Home Exchange” is Perth.
On-market Buy-back
There is no current on-market buy-back.
Other Information
Yowie Group Limited is incorporated and domiciled in Australia, and is publicly listed company
limited by shares.
Corporate Governance Statement
The Board of Directors of the Company is responsible for the Corporate Governance of the
Company. The Board is committed to achieving and demonstrating the highest standard of
corporate governance applied in a manner that is appropriate to the Company’s circumstances.
The Company has taken note of the Corporate Governance Principles and Recommendations
4th edition, which became effective for the first full financial year commencing on or after 1
January 2020.
The Company’s Corporate Governance Statement is current as of the date of this report and it
has been approved by the Board. The Corporate Governance Statement is available on the
Company’s website at: www.yowieworld.com
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